4M Pounds windfall for underpaid workers
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30 May 2013
More than 26,000 workers denied the National Minimum Wage by
their employers have received a £4 million windfall after action by HM
Revenue and Customs (HMRC).
In 2012-13, HMRC investigated 1,693 complaints against employers for
allegedly breaching minimum wage rules. This resulted in 708 employers
receiving automatic penalty charges of up to £5,000 and 26,519
employees receiving an average of around £150 in back pay, topping up
wages that had previously been below the legal minimum rate.
Employment Minister Jo Swinson said:
"Paying less than the minimum wage is totally unacceptable. Whenever we
find examples of businesses breaking the law we will crack down on them.
"Supporting fairness in the workplace is one of our key priorities and
the National Minimum Wage is one way of making sure this happens. It
supports as many workers as possible without damaging their employment
prospects, which is why effectively enforcing the minimum wage is
critically important in making sure it stays a success.
"The figures from last year show that HMRC can really help people who
have been underpaid to claim back the money they are owed.”
Cases where HMRC has taken action against employers in the past year:
- A major fashion chain was ordered to pay its 90 unpaid interns almost
- A multi-outlet retailer, which required employees to purchase
specific items of clothing from its range, was ordered to repay almost
£170,000 for more than 6,000 workers.
- A national retailer, which required its employees to attend work
before and after opening hours without pay, was ordered to pay arrears
of wages of more than £193,000 for nearly 3,500 workers.
- A recruitment agency, requiring its workers to attend training at a
client's business without pay, was ordered to pay £28,000 for 300
Michelle Wyer, Assistant Director of HMRC’s National Minimum Wage team,
“Paying the National Minimum Wage is not a choice – it’s the law. HMRC
enforces the rules, protecting workers from rogue employers, ensuring
they get at least the wage to which they are legally entitled.
“Where an employer ignores these rules, we will take steps to ensure
arrears are paid out in full and the employer fined. In the most
serious cases, criminal prosecution can follow.”
The vast majority of National Minimum Wage abuse cases are dealt with
by HMRC using civil penalty powers, as this route is usually the most
appropriate and provides the most cost-effective resolution for
taxpayers. However, in more severe cases HMRC will take criminal action
and seek a prosecution.
Anyone who believes they are not being paid the National Minimum Wage
can call the Pay and Work Rights Helpline on 0800 917 2368. Calls to
the helpline from interns, who are working for nothing or for “expenses
only”, are being fast-tracked to HMRC enforcement officers for
In 2012-13,17,775 people called the Pay and Work Rights Helpline for
advice or to report an illegal wage, leading to HMRC opening
1,408enquiries into employers.
1. In 2012-13, 708 employers were found to be abusing the National
Minimum Wage rules and received a financial penalty. Fifty one of those
employers were fined the maximum amount allowed by law, £5,000.
2. The National Minimum Wage is £6.19 an hour for workers aged 21 and
over. This will increase to £6.31 an hour from 1 October 2013.
3. Further information about the different minimum wage rates, which
depend upon age and apprentice status, are at https://www.gov.uk/national-minimum-wage-rates
4. The Department for Business Innovation & Skills (BIS) has
responsibility for National Minimum Wage policy. HMRC enforces the
5. HMRC’s compliance teams:
- investigate complaints from workers and third parties that minimum
wage has not been paid
- inspect employers’ records to check that they meet their obligation
to pay the minimum wage
- help employers to understand their obligations under minimum wage
- secure pay arrears
- present cases to Employment Tribunals on behalf of workers.
6. The Pay and Work Rights Helpline provides advice in more
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Article Published/Sorted/Amended on Scopulus 2013-06-04 11:07:25 in Tax Articles